TOKYO (MNI) – Economists have revised up their forecasts for
Japan’s economic growth for this fiscal year and fiscal 2011 while
projecting that prices will begin to post a year-on-year rise in
April-June 2012, according to the latest monthly survey by the Cabinet
Office’s Economic Planning Association released on Thursday.

The survey also showed that the number of the economists who expect
the Bank of Japan to ease credit further totaled 13, little changed from
14 in the previous survey but down sharply from 23 in November.

Meanwhile, economists expecting a credit tightening in the next 12
months totaled 28, also little changed from 27 in December but up
sharply from 17 in November.

Economists polled forecast on average an annualized contraction of
-2.03% in real GDP for October-December 2010, worse than their previous
average projection of -1.92%.

The Cabinet Office will release preliminary Q4 GDP data on Feb .14.

Meanwhile, the average economist forecast for real GDP growth was
revised up to +3.22% from +2.54% for fiscal 2010 and up to +1.39% from
+1.29% for fiscal 2011, the ESP survey showed.

The average forecast for fiscal 2012 GDP was +2.06%, up from +1.91%
in the previous survey.

These forecasts are somewhat weaker than the BOJ board’s Oct.28
median projection at +1.8% for fiscal 2011 and +2.1% for fiscal 2012.

The BOJ will provide an update to the board’s projections after the
next policy-setting meeting on Jan. 24-25.

The survey showed that economists expect the year-on-year change in
core consumer prices to return to positive territory in fiscal 2012 with
a 0.14% gain over fiscal 2011, revised down from +0.18% projected in the
previous poll. This will follow three years of continued price drops.

The average economist forecast for the core CPI (excluding fresh
food but including energy) for fiscal 2011 ending on March 31, 2012 was
-0.18%, revised up from -0.20% forecast in the previous survey.

It is weaker than the latest median projection by the BOJ policy
board at +0.1% for fiscal 2011 that was presented at the Oct. 28 policy
meeting.

The average economist forecast for the core CPI was -0.85% in the
current fiscal year ending March 31, up from -0.88% in the previous
survey.

In fiscal 2009, the average national CPI fell 1.6% after rising
1.2% in fiscal 2008. The FY09 drop was the first in five years, since
-0.2% in fiscal 2004.

The association polled 43 economists and research institutions from
Dec. 24 to Jan. 6 for its ESP Forecast, and 42 answered on the growth
and inflation outlook and 41 on the BOJ’s monetary policy stance.

The previous survey was conducted from Nov. 24 to Dec. 1.

tokyo@marketnews.com
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